1. Tell us about yourself. Where are you from? What do you do?
My name is Dirk Friczewsky. I live and “work” in the metropolitan area of Frankfurt, my office is based in the heart of Wiesbaden. FX-trading is my passion and the biggest part of my job in being a full-time-trader. Besides that I am self-employed, give lessons in trading and write colums, articles and market-snapshots for clients.
2. How did you discover forex trading? How long have you been trading?
I started to trade the foreign exchange markets (FX) around the beginning of 2004 I guess. I slowly moved into that kind of asset class and began to try “Demo-trading” just to get a feeling for this kind of new market to me.
Thinking back, I discovered forex trading while searching for some new interesting books and sources about trading. I soon realized, that there are almost no books available with the topic “FX-trading” or close to that topic. The more books you find, the less interesting it gets I guess. Meanwhile forex trading seems to be en vogue.
Talking about my trading experience, I started to trade the Stock-markets in 1998, later on more and more index-trading, commodities and derivatives. From time to time I still trade other asset classes like stocks, bonds, commodities or index-linked derivatives/futures. In general it is always important to watch the bond-sector and other sectors as well. Being a FX-trader you should see the market as a whole and watch and learn from it.
3. Describe your typical day.
My typical day starts with analysing the markets while having breakfast. That means I start early in the day watching CNBC or Bloomberg for example while testing setups, drawing some charts in the broadly known timeframes. CNBC or Bloomberg are turned on the whole day until I leave the office.
Sad but true: Normally a typical day ends up in surprises like every trading day. As a trader you need to accept the facts and be able to adopt to new ones. Besides using a bunch of well-known indicators, a lot of positions are entered or left because of market-feeling, experience and the so called “momentum”. In a comfortable trading-day situation, I would have already banked some nice profits. That is the nice part of the day, when I simply turn-off everything and enjoy the rest of the day. Most of the time I don’t work from home - I guess that is very important to be able to leave the office, close the door and get a little distance between you and the markets.
4. Forex trading obviously isn’t for everyone, what motivates you to stay in the game?
First of all FX-trading isn’t a game. It is part of an illusion that FX-trading has anything in common with gambling, betting - however you may call it. It is more than just a technical approach to the markets with the help of dozens of indicators, it is more than just trading a pair up and down - it is hard work.
You won’t survive without a plan, obeying certain rules of risk and money-management and listening to your own coverage and heartbeat. The most important fact in FX-trading is liquidity. Liquidity becomes your friend.
The so called “4 trillion-market” has a big advantage if you compare it with other asset-classes. The more liquidity you enjoy, the less of the whole show is beeing manipulated. It is almost impossible to manipulate the FX-markets. That is why participants in FX-markets have the same chances like institutionals for example. That is the most important fact and why I stay in the “game” and keep on trading this fascinating market. On top of that you may even enjoy the benefits like fantastic volatility, which is a must for good entries and exits.
5. For forex traders, what are the benefits of using Twitter or Facebook? Are there any?
I usually don’t use Facebook for trading-issues - only sometimes when I use it to spread articles, columns and opinions.
However, I use Twitter for my everyday-work. In terms of being prepared for the markets, Twitter is beneficial for everyone who understands how to use this fantastic “media-tool”. Traders or investors, media or agencies, you can follow them all and they can follow you back if it makes sense for them.
It is not rare at all to be informed much faster with the help of Twitter - I got informed faster via my twitter-feeds than via CNBC or Bloomberg a few times. With the right guys added to your trading-feed, you may get some nice opinions, information and knowledge. Just try it out. There is a lot of chart-technical support out there, free analysis.
You need to know what the difference is between news, analysis, trading-setups, chart-technical coverage and more. You also need to know not to take them as trade-recommendations. In case you lose a trade while following a trade-setup you just need to know: you pushed the button yourself!
6. Quick! Who are your top 5 must-follow traders on Twitter and why?
Hard to pick out only a few of a crowd of real good guys on Twitter. I would follow @50Pips, @tweetertrades, @alaidi, @fx_13and @SE1_Trading I guess.
You could on top of that, follow my personal account on Twitter named @FXDIRK.
7. Have you ever blown accounts or suffered huge losses? Any realization/insight after that happened?
Sure I have - I have killed 2 accounts - big difference is, that I killed my own money and did not shred clients money. In my opinion there won’t be anyone being quite successful in trading out there without having experienced some lessons taught by burning his own cash.
Sometimes you need the pain to realize what went wrong. Don’t ever overestimate yourself and think that you are the only smart guy out there in a big pond of sharks.
8. What are your personal do’s and don’ts as a trader?
Usually you have more do’s and don’ts - looking back for a couple of years now, you may likewise listen to the following ones:
- “Don’t” prepare a new cup of coffee while already have open positions - could be most expensive coffee ever!
- “Do” trade when you’re ready with your risk and money management solution, saves you and your account.
- “Do” use market-makers during slow days and “do” use ECNs when riding rollercoaster-markets. It is not a mistake to have 2 different types of accounts
- “Do” stick to the plan.
- “Don’t” get confused by opinions and analysis - trust your own research and knowledge.
- You “don’t” need to change a winning team. If you are satisfied with your broker, why experiencing trouble with another one?
- “Don’t” overdo, rush into a trade or get pushed into a position - let the market be a market and let trades or trade-scenarios run into your direction to enter them.
- You “don’t” need to trade every single day - if not - smell the flowers!
9. What are your top 3 tips for those still learning how to trade?
Know that getting rich in a few hours and days is a fairytale - trading is hard work! You need to enter the markets with a lot of respect. Finally, you are trading with or against professionals every second. FX is the ultimate discipline in trading - always remember that!
Every trader should develop his own plan and system in approaching the markets and certain trades. Always follow the plan - discipline is continously needed for positive results and sustainable work.
Don’t be too greedy, bank small winners - you won’t die on having banked 10 small winners, but possibly on not avoiding to stop one big loser. FX-markets can suddenly become very fast - it is easy to lose your pants in a second.
10. If you weren’t a trader, what do you think would you be doing now?
…travelling around the world with a bike and discovering the hottest spots on earth!